How do you select your Shares/Funds?

WatsonNimrod

DJBenson wrote: »

This was a bit of fun more than a serious investment, I bought at just over 8p and the shares have maxed out at 30p this year - the company hasn't mined anything yet so I figure if they hit 20p I'll have made a bit of spending money :beer: nothing more serious/scientific than that.

Good for you.

I make it a rule to have a few quid in 'one' penny dreadful.

If nothing else it's a bit of fun and keeps my interest going during the long periods when I don't trade, it's nearly always an airline (exactly!). This year it's Fastjet

It's about 0.05 of my portfolio, but it's almost always the first thing I look at when I check the markets in the morning.

marathonic

I haven't started my S&S ISA yet as I'm just doing a Regular Savings Cash ISA this year to rebuild an emergency fund after a house purchase.

I've also read various articles stating that someone shouldn't be investing in individual shares with sums of less than £15k or so - but I suppose it has to be taken in context.

Take someone that saves £200 per month from their salary and wants to buy through the X-O service at a cost of £5.95 + 0.5% Stamp Duty per trade. If that person wanted their purchase costs to be a maximum of 1% of trade value, they'd need to be investing £1,190 at a time and could only purchase a new share every 6 months. A reasonably diversified portfolio of 10 shares could take 5 years to build.

Now take someone that can save £600 per month. Within a year, they'd have 6 individual shares. If you take the first share investment, it's obviously a risky portfolio. However, the risk is limited to what the individual could save in 2 months and will be eroded very quickly as more diversification is added.

Therefore, I'd say that a blanket "do not invest in shares until you have £15,000" isn't really good advice without taking into context the individuals savings rate.

grey_gym_sock

it's fine to look ahead by a year or 2, and plan based on how much you expect to have invested then.

however, 10 shares is not really properly diversified, even for UK shares. 15 or 20 shares would be more like it. which would (if putting £1190 into each share - which i'd agree could be a fair minimum with those dealing costs) imply projected investments of nearer £20k.

but that only covers UK shares. i think it always makes sense to have some overseas shares, too. and usually also some other things (bonds). so total projected investments should be more than £20k for this to make sense. (e.g. if you want 1/3 in UK shares, total projected investments should be at least £60k.)

DJBenson

WatsonNimrod wrote: »

Good for you.

I make it a rule to have a few quid in 'one' penny dreadful.

If nothing else it's a bit of fun and keeps my interest going during the long periods when I don't trade, it's nearly always an airline (exactly!). This year it's Fastjet

It's about 0.05 of my portfolio, but it's almost always the first thing I look at when I check the markets in the morning.

Same here - I don't particularly "care" how well Royal Mail are doing, but I've got alerts set up for anything on Sirius Minerals and actively keep an eye on their business activities in the hope the share price will rocket to the dizzy heights of 30p at which point I'll be off into the sunset with my ~£400 profit :rotfl:

Wilkins

grey_gym_sock wrote: »

however, 10 shares is not really properly diversified, even for UK shares. 15 or 20 shares would be more like it. which would (if putting £1190 into each share - which i'd agree could be a fair minimum with those dealing costs) imply projected investments of nearer £20k.

QUOTE]

Either you buy a whole lot of shares at once and quickly achieve wide sector/geographical diversity but lose out in temporal diversity, or you buy gradually and trade the risks the other way round. You can't have it both ways, and both ways have their strengths and weaknesses.

A_Flock_Of_Sheep

I select my shares by dribbling into ETF Index Trackers. I also have 2 REITs and one fund that has shares in some of the FTSE100 index. I don't want to track the entire top 100 index. It is Troy Trojan Income for that.

My tracker is MIDD for the 250, VUSA for S&P 500 and also Vanguard Japan. I also have Unicorn UK Income.

I did have shares when I was dabbling about and investing was all new and exciting for me. But I can't be hassled with that now. I think the slow n steady approach is better like Tim Hale says.

My last final sale of shares was Royal Mail. Profits from all my share disposals will be used to feed the slow n steady route. I had one dud in my portfolio which was Unilever which alas I binned at a loss of about 6% but I only had £1000 worth so it wasn't a big hit and all part of the learning curve I guess.

grey_gym_sock

Wilkins wrote: »

Either you buy a whole lot of shares at once and quickly achieve wide sector/geographical diversity but lose out in temporal diversity, or you buy gradually and trade the risks the other way round. You can't have it both ways, and both ways have their strengths and weaknesses.

you can have it both ways by drip-feeding into funds/ITs, and later on switching into individual shares (or at least switching the UK part of your portfolio).

DJBenson

Set a sell-limit on Hargreaves Lansdown for my MERL shares and they sold this morning for 352p giving me a clear 10% profit - not a bad return for very little effort.